College & Workforce Readiness

Does Graduating From a Charter Help or Hinder Future Earnings?

By Arianna Prothero — September 13, 2016 4 min read
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There’s a new research dispute to add to the ongoing debate over whether charter schools outperform regular public schools: Whose graduates earn more money in adulthood?

Two recent studies attempt to answer that question.

The first, released in April by researchers at Georgia State University, Vanderbilt University, and Mathematica Policy Research, looked at charter school students in Florida and found that, yes, they do go on to earn significantly higher salaries than their noncharter peers.

But an examination of charter school students in Texas released last month by researchers from Harvard University and Princeton University found the opposite: Charter school students had lower future earnings.

What are educators and parents supposed to make of these contradictory findings?

“There’s not a lot of research on the long-run effects of charter schools,” said Kirabo Jackson, an associate professor at Northwestern University’s school of education and social policy. Jackson, who was not involved with either study, described both as high-quality, and said the questions the researchers were attempting to answer are important.

“If you take a step back and ask yourself what is the purpose of education, I think most people will say that the education system should be designed to provide students with the skills and capacities to be productive members of society.”

Scant Research

The reason there has been so little research on long-term outcomes of charter schooling—such as earnings—is because charter schools simply haven’t been around that long.

The first law creating charter schools was passed in Minnesota 25 years ago this summer. Texas passed its law in 1995, and Florida in 1996. In many states, charter graduates are just starting to enter the workforce in large enough numbers to study. But other hurdles remain for researchers.

“One limitation, of course, is just the fact that we’re trying to look at long-run outcomes, and so we’re limited to the charter schools that started up fairly early in Florida, so that we can track students long enough into the labor force,” said Tim Sass, an economics professor at Georgia State University and one of the authors of the Florida study. “And it may be that those charters were different than charters that are operating today, and it also limits the size of the sample we can look at.”

David Dunn, the executive director of the Texas Charter Schools Association, believes those same issues were in play in the Texas study.

“Because they needed to look at kids who had graduated a number of years ago, they had to look at charter data from many years ago—and many of those schools have been closed for lack of performance,” he said.

In addition to the positive effects on future earnings, the Florida study also found that charter school students were more likely to graduate from high school and enroll in—and stay in—college. Specifically, the researchers found that charter school graduates were 12 percent more likely to persist through their second year in college and, by the time they were in their mid-20s, earned 12 percent more than their district school counterparts.

However, attending a charter school in Florida didn’t seem to improve students’ test scores.

Using data from the Florida education department on student test scores, demographics, and college enrollment, as well as state employment data, the study’s primary analysis compared 2,282 students that attended charter schools throughout high school to those who switched from a charter middle school to a district high school. The study was published in the Journal of Policy Analysis and Management.

Meanwhile, the Texas study found that while attending a “no excuses” charter school—which the study describes as having stricter rules, uniforms, and longer school days and years—leads to higher test scores and four-year college enrollment, it has no meaningful effect on earnings. The study was published by the National Bureau of Economic Research as a working paper.

Charter schools that did not meet the definition of “no excuses,” however, stumbled on all three measures: hurting test scores, four-year college enrollment, and earnings.

Higher Scores, But Not Wages

Economists Will S. Dobbie of Princeton University and Roland G. Fryer Jr. of Harvard University, propose several potential causes for the results they found in Texas—particularly for why some charter schools raised test scores but not earnings.

They suggested that although math and English/language arts instruction are important to improving standardized-test scores, subjects such as art and history may be equally important to success in the workforce. In other words, the heavy focus on math and reading in “no excuses” charters, which serve mostly low-income minority students, may be what’s depressing charter students’ wages later in life, even though they did better on tests and were more likely to go to college.

The Texas study compared students in charter middle and high schools with students in district schools with whom they had attended the same noncharter elementary schools. Using data from three state agencies, Dobbie and Fryer tracked students from kindergarten through college and into the workforce.

Neither study included earnings data from former students who went on to work out of state, adding another wrinkle to the results.

“If high achievers tend to leave the state for work, then both studies might be misrepresenting the effect of schools on earnings,” said Jackson.

Many variables could account for the studies’ opposing findings, from small differences in methodological approaches to differences in student populations and even in schools, said Jackson and Sass.

Although the two studies turned up different results on earnings outcomes, they did both find that charter school graduates were more likely to stay in college.

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